Nokia puts 64-acre Arlington Heights campus on the market

(Crain's) — Nokia Siemens Networks B.V. is seeking a buyer for its 64-acre office campus in Arlington Heights as the Finnish telecom giant consolidates space used by its 1,200 employees there.

Nokia took control of the property, along State Route 53 and Dundee Road, about two years ago as part of its acquisition of Motorola Inc.'s wireless network infrastructure business for $975 million. The campus was valued at nearly $45.5 million in the deal, according to Cook County property records.

Nokia, which has its U.S. headquarters in Irving, Texas, confirms it has hired a CBRE Inc. capital markets team led by Senior vice President Andrew Sandquist to sell the campus, which has more than 1.1 million square feet of offices.

A buyer would take over a property that will be about 38 percent occupied after the Espoo, Finland-based company completes its consolidation. Nokia plans to move all of its employees to the south end of the property, into two buildings at 1455 and 1475 W. Shure Drive that total 428,482 square feet, according to marketing materials from CBRE. The company will lease that space for 10 years.

Nokia also plans to sign a one-year lease for three buildings comprising 692,389 square feet on the north end of the campus. But the company plans to vacate the buildings, 1421, 1441 and 1501 W. Shure Drive, after the lease expires.

“Arlington Heights will remain a major research and development site for Nokia Siemens Networks, but this property has been underutilized,” a Nokia spokeswoman says. “By moving everyone to one campus with fewer buildings, we can place the employees closer together and we can sell or sublease the other space. There was a thorough review by our real estate team that determined more efficient uses for our real estate.”

The spokeswoman declines to name the price Nokia will seek for a sale.

In its current use, the property would face plenty of competition, as the Chicago suburbs are flooded with unused office space. The suburbs had 24.6 percent overall vacancy after the first quarter of 2012, according to Jones Lang LaSalle Inc. The northwest suburbs had the second-highest vacancy rate of all submarkets, at 27.1 percent.

A buyer could redevelop the 44-acre North Campus, perhaps with apartments, while collecting rent from the smaller campus. Or a corporation could look to buy the low-cost office space, rather than renting.

“As a redevelopment play, the economics don't work for office space,” Art Burrows, a senior vice president at Oakbrook Terrace-based NAI Hiffman, says of the northwest suburbs. “Your rental rates are too low. You can buy office and retail for below replacement cost. The only thing that could possibly work as a redevelopment is multifamily or a build-to-suit.”